An employer’s motion to compel arbitration of a former employee’s discrimination claim should be denied because there is a genuine issue of material fact regarding whether the plaintiff agreed to arbitration, a federal court in Michigan has held.

Blue Cross Blue Shield of Michigan terminated Ryan Romano after he sought a religious exemption to the company’s mandatory COVID-19 vaccine requirement. The company then sought an order compelling Romano to arbitrate his employment discrimination claims.

U.S. District Court Judge George Caram Steeh denied the motion.

“BCBSM has not produced incontrovertible evidence that Romano assented to the arbitration procedure through the online application process,” Steeh wrote. “Accordingly, Romano’s affidavit denying that he agreed to the arbitration procedure is sufficient to put the validity of the arbitration agreement in issue.”

Online application

The plaintiff had been hired as a senior health care analyst by BCBSM in September 2019. After he was fired, he filed suit alleging religious discrimination in violation of Title VII and the Elliott-Larsen Civil Rights Act, or ELCRA.

BCBSM, however, said Romano’s discrimination claims were subject to an arbitration agreement between the two parties. As part of the online application process, BCBSM said all employees must agree to arbitration.

The “Application Statement” reads: “I understand and agree that, if I am employed in a nonbargaining unit position, any termination related claims I have, of any nature, will be decided on an exclusive, final, and binding basis under the Blue Cross Blue Shield of Michigan Arbitration Procedure for Non-Bargaining Unit Employees.”

While prospective employees must electronically sign this statement, BCBSM doesn’t claim that applicants “may access the details of the arbitration procedure prior to signing or being hired.”

When Romano was hired in 2019, BCBSM argued that he must have signed the Applicant Statement — including the arbitration provision — as part of the process. But the company didn’t have any documentation showing Romano’s electronic signature due to a 2020 “software change.”

Romano claimed the records produced by BCBSM were incorrect and denied reviewing or signing the Applicant Statement in connection with his hiring. He applied for another position in 2021 and contended he didn’t agree to arbitration during this process, either. BCBSM didn’t have records showing Romano’s agreement to the arbitration procedure in connection with the 2021 application.

Romano also claimed Blue Cross didn’t inform him of the arbitration agreement during his new employee orientation nor did the company tell him it was a condition of his employment. BCBSM maintained that the arbitration procedure was available on its intranet site for all employees.

Arbitration agreement

A written arbitration agreement “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract” under the Federal Arbitration Act, or FAA. Parties may agree to submit employment discrimination claims to arbitration.

But if the legitimacy of the agreement is “in issue,” the party opposing arbitration must present a genuine issue of material fact regarding its validity.

“Romano has unequivocally denied signing the Applicant Statement containing the arbitration agreement or that BCBSM informed him of the arbitration procedure,” Steeh pointed out.

BCBSM, citing Anderson v. Crothall Healthcare Inc., claimed this isn’t enough to put the validity of the agreement in issue.

The judge rejected that argument.

“In Anderson and similar cases, however, the employer produced documentation showing that the employee electronically signed the arbitration agreement,” Steeh explained. “Under such circumstances, which are not present here, a blanket denial is unavailing.”

BCBSM’s argument that Romano agreed to arbitration through his continued employment was also unsuccessful.

While an employee may show assent to an arbitration agreement through conduct — such as by continuing his employment — the employer must show that the employee had adequate notice of the arbitration agreement and that continued employment would convey his assent.

Here, BCBSM didn’t claim that it provided Romano with a copy of the arbitration procedure or that it was available to him before he started his job. And Romano asserted that he wasn’t notified of the existence of the arbitration procedure during his new employee orientation or told that it was a condition of his employment.

“Although the procedure was ‘available’ on BCBSM’s intranet site, there is no evidence that Romano was directed to review that procedure or that continued employment would convey his agreement,” Steeh wrote. “The evidence does not suggest that Romano agreed to the arbitration procedure merely by continuing his employment with BCBSM.”

The court denied BCBSM’s motion because genuine issues of fact exist regarding whether the parties mutually agreed to arbitration.